What to watch for today
Face off in Algeria. Government troops have surrounded a gas facility where some 20 foreign workers were taken hostage by Islamist fighters, reportedly in connection to the on-going conflict between French-led international forces and Islamist rebels in nearby Mali. A Briton and an Algerian were killed in the attack and the hostages include French, British, Japanese, Norwegian and American citizens, according to the Algerian government, which said the militants have demanded to leave the country with them. Meanwhile, in Mali, French troops are now directly engaging the rebels for the first time.
Eyes on US home construction. After a closely watched indicator of housing activity remained steady yesterday, data on housing starts and building permits issued in December will be a key sign of US economic fortunes. A rebound in home construction has been the foundation of recovery from the financial crisis—some even see a new bubble forming.
Earnings season continues, with announcements from Taiwan Semiconductor, Bank of America, Citigroup, American Express, and Intel, among others.
While you were sleeping
Surprise rise in Australian joblessness. Employers down under had been expected to add 4,000 jobs but instead cut payrolls by 5,500 staff in December, pushing up the jobless rate by 0.1 percentage points to 5.4%. Weaker commodity prices and the high Australian dollar have taken a toll on the previously buoyant economy.
The US grounded the Dreamliner. The Federal Aviation Administration told US airlines to take Boeing’s advanced 787 jet out of service until the risk of battery fires is addressed. United Airlines is the only US carrier using the new model, but Air India and Chile’s LAN said they would also follow the FAA’s lead. Japan Airlines and All Nippon Airways, leading Dreamliner users which experienced repeated problems, grounded their fleets earlier.
The US trade deficit with China shrank. Well, not really. But economists are better at measuring it now, thanks to a year-long study that does a better job of tracking the provenance of imported components before they are assembled into a final product; taking that into account, the US-China trade deficit looks 25% smaller.
Commodity moment: Iron ore sinks like, well, iron. The price of the steel ingredient dropped $7.50 a ton, the largest change since 2011, over uncertainty about demand from China.
Goldman Sachs and JP Morgan announced positive earnings, lower wages. The two banking giants posted their fourth quarter results, announcing earnings that beat analyst expectations but also reduced executive pay in a nod to the cost-cutting, as well as the economic performance, underlying the firms’ results. JP Morgan also released two internal investigations into its $6 billion loss “London Whale” debacle; it’s no wonder that CEO Jamie Dimon’s pay was sliced in half.
EBay reports lower profits than last year. But last year’s figures were inflated by the sale of Skype, the online telecommunications platform. This year the company’s payment-processing unit, PayPal, continues to drive revenue and could have a bumper year in 2013; meanwhile, economists believe eBay actually reduces the costs (pdf) of global trade.
Some American ideas for gun safety. President Barack Obama presented proposals for reducing gun violence developed by vice president Joe Biden in the wake of December’s school massacre. They include closing loopholes that allow gun buyers to avoid background checks—a move that would have widespread support—as well as various measures Obama could take without consulting Congress, which would oppose many of them.
No more reporters to call. Daniel Edelman, the public-relations mastermind who founded his eponymous agency, now one of the world’s largest, in 1952, passed away at 92.
Quartz obsession interlude
Matters of debate
Has the US government become the world’s largest insurance broker? If you judge by its spending habits.
India will need more than good advice to fix its infrastructure deficit. It will also need lots of cash, for starters.
A China slow-down is far more dangerous than fast expansion. While other countries worry about the political power that comes with China’s economic clout, they’ll have a far harder time adapting to a world where China doesn’t grow.
On that note: The People’s Republic is not the world’s factory anymore. Competitors in Southeast Asia are attracting multi-national companies on the hunt for cheap labor.
Mexico hasn’t turned a corner. Murders are down and growth is up, but reforms to loosen the grip of monopolistic elites are still key to progress.
The solution to a lack of economic productivity: sleep less. There are pills for that, and they could increase labor productivity by a third—but at what cost?
Next year is ALWAYS better. The Economist hosts a forum on whether or not 2013 will be better than 2012.
Meet one of the few entrepreneurs in North Korea. Felix Abt, a Swiss national who worked in Pyongyang for seven years, talks about doing business in the insular nation and teaching socialists about marketing.
American media gadfly to build libertarian utopia. Glenn Beck, the erratic conservative commentator, will attempt to build an Ayn Rand-inspired city.
Speaking of utopian city states, whatever happened to all those arcologies? The Awl chronicles the weird, wacky world of arcologies (self-sustaining communities), from Abu Dhabi to Moscow.
American cash is still king, especially $100 bills. “Greenbacks with Ben Franklin’s face remain the currency of choice for Argentinians, Azeris, and anyone else looking outside the US looking to squirrel away a bankroll.”
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